Mutual Mistake
Abstract Mutual Mistake of fact is when both parties of a contract make an assumption of fact when contract is formed and signed. The mistake must significantly change what you have to do under the contract, almost to the point where it’s an entirely different agreement. Although, if you knew there was a strong chance or probability of mistake at the time the contract was signed, you may have assumed the risk of that mistake. You therefore cannot use the mutual mistake defense. Not all cases of Mutual Mistake are strong enough to void a contract.
Contract Law: Mistake of Fact In the given case: Josh Hartly was interested in purchasing a new car and visits his local auto dealer. In the course of his negotiations, he tells the salesperson that he wants the car with a 3.2 liter V6 engine and not the one with a 3.9 liter engine because he has concerns regarding the fuel economy of the 3.9 liter engine. Josh then signs a contract agreeing to purchase the car with a 3.2 liter V6 engine. What neither Josh nor the salesperson knew was that the manufacturer had already stopped manufacturing both the 3.2 liter and the 3.9 liter engines, and was equipping the cars with a newly designed 3.5 liter engine. This is a mutual mistake of fact that makes the signed contract void due to the lack of knowledge by both parties that the manufacturer had stopped making the cars with either a 3.2 liter or a 3.9 liter V6 engine and now only makes a 3.5 liter V6 engine for there cars. Someone trying to avoid his or her obligation under a contract can raise a mutual mistake defense. The defense states that both parties to the contract relied on a mistaken assumption when entering the contract, which then makes the contract void. A mistaken assumption is a fact that both John Hartly and the auto salesman believed to be true at the time the contract was signed, in this case the fact in question was that John Hartly was to receive a car with a 3.2 liter V6 engine. However,
Contract Law: Mistake of Fact In the given case: Josh Hartly was interested in purchasing a new car and visits his local auto dealer. In the course of his negotiations, he tells the salesperson that he wants the car with a 3.2 liter V6 engine and not the one with a 3.9 liter engine because he has concerns regarding the fuel economy of the 3.9 liter engine. Josh then signs a contract agreeing to purchase the car with a 3.2 liter V6 engine. What neither Josh nor the salesperson knew was that the manufacturer had already stopped manufacturing both the 3.2 liter and the 3.9 liter engines, and was equipping the cars with a newly designed 3.5 liter engine. This is a mutual mistake of fact that makes the signed contract void due to the lack of knowledge by both parties that the manufacturer had stopped making the cars with either a 3.2 liter or a 3.9 liter V6 engine and now only makes a 3.5 liter V6 engine for there cars. Someone trying to avoid his or her obligation under a contract can raise a mutual mistake defense. The defense states that both parties to the contract relied on a mistaken assumption when entering the contract, which then makes the contract void. A mistaken assumption is a fact that both John Hartly and the auto salesman believed to be true at the time the contract was signed, in this case the fact in question was that John Hartly was to receive a car with a 3.2 liter V6 engine. However,
References: Emanuel, S. L. (2011). Mistake. In Wolters Kluwer MBE Bar Prep. Retrieved from https://www.inkling.com/read/wolters-kluwer-mbe-bar-prep/mbe-contracts/chapter-4-mistake LaMance, K. (2011, November 8). Revoking contracts: mutual mistake lawyers. Legal Match. Retrieved from http://www.legalmatch.com/law-library/article/revoking-contracts-mutual-mistake.html LaMance, K. (2013, August 28). Uniform commercial code lawyers. Legal Match. Retrieved from http://www.legalmatch.com/law-library/article/uniform-commercial-code-lawyers.html Rivera, J. (2013, November 12). When does the UCC not apply to sale of goods? Legal Match. Retrieved from http://www.legalmatch.com/law-library/article/when-does-the-ucc-not-apply-to-a-sale-of-goods.html